IMF completes 5th review of Jordan economy

AMMAN — The executive board of the International Monetary Fund (IMF) has completed the fifth review of Jordan’s performance under a three-year economic programme supported by a Stand-By Arrangement (SBA). 

The 36-month SBA in the amount of about $2 billion, or 800 per cent of Jordan’s quota at the IMF, was approved by the executive board on August 3, 2012. 

In a statement, the IMF said the completion of the fifth review enables the immediate release of $125.4 million, bringing total disbursements under the programme to about $1.38 billion.

Finance Minister Umayya Toukan on Sunday told the Cabinet that the completion of the fifth review was a success attributed to the fiscal reforms the government has made, resulting in higher domestic revenues and tighter spending without adding any burdens or taxes on citizens last year.

He said the ministry had rejected proposals by the fund to increase the sales and other taxes. 

Toukan said the ministry has presented a package of alternative measures to increase revenues and control spending.

The approval of the IMF to complete the fifth review, Toukan said, came shortly after the international rating agency Standard & Poor’s upgraded the credit outlook for Jordan from negative to stable. 

In completing the fifth review, the executive board approved Jordan’s request to rephase the undrawn fund purchases in three disbursements over the remaining programme period, according to the statement. 

The statement quoted Naoyuki Shinohara, deputy managing director and acting chair, as saying: “Jordan faces an increasingly difficult regional environment. The conflicts in Syria and Iraq, as well as the disruptions in gas supply from Egypt, are putting pressure on the economy, in particular on the fiscal and external accounts. Nonetheless, the macroeconomic situation has remained largely stable, with growth gradually recovering, inflation contained, the current account deficit narrowing and international reserves at a comfortable level.”

He added: “The authorities remain committed to fiscal consolidation. Fiscal measures for 2015, including contingencies, provide assurances that public debt will move onto a downward path, starting in 2016.”